Apple Reportedly Secures Big Ad Deals for iTunes Radio

Apple has reportedly secured a handful of high-profile ad deals for its hotly anticipated iTunes Radio service, which is set to launch next month with iOS 7. Set to compete directly with Pandora, Apple’s upcoming service will play songs based on your taste in music, and get better and more personalized the more you use it. The service was originally detailed at Apple’s WWDC conference in June.

According to sources close to Apple’s plans, the Cupertino company is partnering with McDonald’s, Nissan, Pepsi, Procter & Gamble and a few other brands to run advertisements within iTunes Radio. The deals allegedly range from high single-digit millions of dollars to tens of millions, AdAge said, and includes a one-year commitment. The launch partners are getting exclusivity through the end of 2013 within their fields, sources claim, meaning you’ll only hear Nissan commercials for automotive, and so on.

Ads will apparently be served in three different ways, AdAge said, including interstitial audio and video, slate and interactive display ads; the interactive display ads will be designed to take over your screen, whether you’re on a mobile device or computer—Windows PCs included. Right now, ads are being scheduled to run every fifteen minutes, about every four or five songs, with video ads carefully picked to run soon after a user first hits play, or once a user skips a track.

At launch, advertisers reportedly won’t have much control over where ads show up, but once the service is more established, companies will be able to target ads to specific devices; the cost of ads will be determined by the type of device advertisers want to target, with iPhone ads apparently being the cheapest. Sources say advertisers will be able to curate their own playlists that will run fewer ads compared to a typical iTunes Radio station, though the stations themselves won’t be branded.

When iTunes Radio does launch, it’ll feature direct links to songs on iTunes, giving Apple another potential revenue point—it’ll be positive for record labels, too. With other competing music streaming services already well established, it’ll take some doing for Apple to get iTunes Radio up and running. But being that it’ll be baked right into every device running iOS 7, Apple will already have a leg up on competitors. That seems good enough for big spending partners, which are already throwing down big money to serve all those ads.